North Dakota Foreign Registration / Cost of skipping
The cost of skipping registration when an LLC works in North Dakota
North Dakota can fine an LLC from elsewhere up to $5,000 for working here with no valid certificate of authority, and the individuals behind the work up to $1,000 each. A court must also halt the business until the penalties are paid and the LLC complies.
The statute
N.D.C.C. 10-32.1-84 sets the consequences. The civil penalty goes to the state and is capped at $5,000. The exposure reaches individuals as well: a governor (or, where there are none, a member or agent) who authorizes, directs or joins in the work faces a separate penalty of up to $1,000.
Who brings the action and where
The Attorney General brings the action in the district court of Burleigh County, which is the county of Bismarck. The venue is fixed by the statute, so an LLC cannot expect to defend close to home.
The injunction
If the court finds that the LLC, or any of its members, governors or agents, transacted business here in violation of the chapter, it must issue an injunction, in addition to the penalty. The injunction restrains the LLC from further business and from exercising its rights and privileges in the state. It lasts until the civil penalties, interest and court costs have been satisfied and the LLC has otherwise complied with the chapter. In plain terms, you cannot litigate your way out; you have to register and pay.
The Secretary of State becomes your agent
A foreign entity that transacts business without a certificate gives up control over who receives its legal papers. The state becomes the stand-in recipient of legal papers in that case, and also when an entity has no agent on file or its agent cannot be reached with reasonable effort. Service on the state counts, so a lawsuit can start before the LLC hears of it.
Court access
The statute for corporations adds that a foreign corporation without a certificate may not maintain a claim, action, suit or proceeding in a North Dakota court until it holds one, and that its contracts stay valid. If your LLC needs to bring a case here, registering first removes the question.
Corporations and nonprofits
A foreign corporation without a certificate cannot start a court case, and a foreign nonprofit is in the same position. Both are liable to the state for the fees they would have paid for the years they operated without a certificate, and the Attorney General recovers them. A foreign limited partnership's ceiling is $5,000, with up to $1,000 for each general partner or agent running the work.
Penalties for a lapsed registration
A different problem arises once an LLC is registered but stops filing. A missed annual report adds $50, puts the LLC in Not Good Standing, and can lead to revocation of the certificate. Reinstating after revocation requires the past-due reports and the $135 fee. The annual report page covers those steps.
How to fix it before anyone asks
An LLC that has already been doing business here without a certificate can still apply. The application costs $135. Whether the state will seek a penalty for the earlier period is a decision for the Attorney General, and a North Dakota lawyer can say how to approach it. What is certain is that the injunction runs until the LLC complies, and compliance starts with the certificate of authority.
Cost comparison
Registering costs $135 and the report $50 a year. The penalty ceiling is $5,000 for the LLC, plus $1,000 for each person directing the business. The numbers are ceilings, not a schedule, but the gap between them and the cost of registering is why registering when in doubt is the safe choice.
Can the LLC avoid the issue by staying small?
The Secretary of State's list of signs, such as a shop, employees and a duty to collect sales tax, turns on activity. See the transacting business page to test your own facts.
About the penalties
What is the maximum penalty for an unregistered foreign LLC?
Up to $5,000 for the LLC and up to $1,000 for each governor, member or agent who directs the business.
Where is the action brought?
In the district court of Burleigh County, by the Attorney General.
Is there a court order too?
Yes. The court must halt further business until the money owed is settled and the LLC complies.
Is it too late to file after work has begun?
No. File now for $135. It ends the unregistered status going forward.
What registering here costs
The state fee for an LLC is $135; a corporation pays $145. Our price is a separate line at checkout. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
Register my LLC in North Dakota
$199
+ $135 state fee
- The North Dakota application prepared from your answers
- The home-state certificate checked against what the state asks for
- A North Dakota registered agent from us, or one you name
- The filed record sent to you
- Renewal: after the first year, the agent service renews at $149 a year
Sources
- North Dakota Secretary of State, limited liability companies
- North Dakota Secretary of State, general business corporation fees
- North Dakota Century Code, chapter 10-32.1 (Uniform Limited Liability Company Act)
- North Dakota Century Code, chapter 10-01.1 (Registered Agents Act)
- North Dakota Century Code, chapter 10-19.1 (Business Corporation Act)
- North Dakota Century Code, chapter 10-33 (Nonprofit Corporations)
- North Dakota Century Code, chapter 45-10.2 (Uniform Limited Partnership Act)
Doing business in North Dakota?
Register the LLC before the first North Dakota sale.